New Gophers’ stadium and Target Field raise a big question: Is Minnesota’s sports industry sustainable?

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The University of Minnesota band will play, and the $288.5 million TCF Bank Stadium will host its first game Saturday.

The grass will grow, and the $545 million Target Field will take Twins baseball outdoors next April.

The legislative gavel will bang, and the effort for a new, nearly $1 billion Vikings stadium — the so-called “Metrodome Next” — will crank up next session.

The ball will bounce, and the lowly Timberwolves will attempt, somehow, to sell tickets at the aging Minneapolis-owned Target Center.

The puck will drop, and the Wild, for the first time since their birth in 2000, will struggle to maintain their nine-year-long sellout streak at the $170 million Xcel Energy Center.

Did we mention the University of Minnesota men’s and women’s basketball teams, both with loyal cores of ticket-buying and corporate-sponsoring clients? Or the Lynx pro women’s basketball franchise, forever reinventing its marketing strategy but annually failing? Or the Minnesota Thunder soccer and St. Paul Saints minor-league baseball teams, both with visions of new stadiums on their wish lists, but both buried by a lack of coverage in the strapped, understaffed and disinterested local newspapers?

As Air Force jets perform a breathtaking flyover Saturday to mark the opening of the new Gophers outdoor stadium, they will be best suited to see from their bird’s-eye vantage a Twin Cities sports market stretched beyond its capacity — “saturated,” as Timberwolves President Chris Wright describes it. And this increasingly competitive Minnesota sports glut comes at a time when the local and national sports industry is dealing with the financial wallop from the down economy.

Courtesy of the University of Minnesota

The Gophers’ TCF Bank Stadium makes its formal debut Saturday.

The Twin Cities sports market is about to be pushed by an increased inventory of luxury seats and more high-end ticket prices even as corporate sponsors reduce their marketing dollars and shake in their boots from the so-called post-AIG effect; that is, the fear that employees and customers will become outraged as moguls pay $150,000 for a stadium suite even as they are laying off workers.

The more Minnesota stadiums’ capacity grows — a total of more than 90,000 seats and 90 luxury suites in the two new stadiums — the more the market is pressed. TCF Bank Stadium and Target Field each have smaller seating capacities than the Metrodome, but both demand huge corporate support with their naming rights, signs and premium seating. That’s even as the Metrodome with its 100 suites remains home to the Vikings (for now). While Minnesota is blessed with a solid collection of Fortune 500 companies, most large firms have cut back on sports-related marketing locally and nationally or been leveled by the recession.

Good indicator: The NBA Wolves actually reduced prices for this coming season and even offered season ticket-holders a full refund if they lost their jobs this year. Still, a courtside seat at Target Center costs $1,550 per game.

The most telling barometer could be the NHL Wild, which has had a decade-long honeymoon in a marvelous arena with a cult following that still deeply feels the pain of the North Stars’ abrupt departure. As with corporate season ticket holders for other teams in the market, the Wild’s are scaling back, often from six to four tickets or from four to two. The Wild opted not to raise ticket price for this season; the top ticket per game goes for $86. Suite holders have face financial challenges, too.

Xcel Energy Center, the home of the Wild, also has been the site of major concerts and political events, including the Republican National Convention and presidential candidate Barack Obama’s nomination victory celebration.

TCF stadium falls shortEven the attractive TCF Bank Stadium, which is center stage this week, hasn’t delivered as promised; about half of the indoor club seats are unsold, as are nearly a quarter of the luxury suites, according to a recent Associated Press report.

The Twins’ have sold 47 of their 54 suites, according to recent reports, and there is legitimate excitement about baseball moving outdoors again. But can they sell out 81 games with about 11,000 tickets costing $29 and more per game?

To talk with team executives, much of the pressure on the market is caused by the downturn in the economy. Teams nationally are being affected. The NFL, the nation’s most prosperous and popular league, could face TV blackouts in as many as a dozen markets this season, according to a recent report in Sports Business Journal, the national trade weekly.

Is this the new normal? Will customers who have cut back on their season tickets or corporations who have trimmed their marketing dollars come back in the fold, if and when the economy bounces back?

A sports sponsorship symposium set for New York later this month includes a kickoff roundtable with some of the industry’s leading marketers. The title: “The Recalibration of Sports Sponsorships and Event Marketing.” Apparently, those in the know are preparing for a structural change in the way corporations back sports properties.

Minnesota’s issuesBut there is more for Minnesotans to be concerned about than the national economy’s impact on local teams. There is the changing face of sports leagues themselves and, most importantly, the inescapable wealth — or lack of same — of the Twin Cities market.

Jones leads a group of owners who believe the longtime “socialism” of the league — in which a franchise in tiny Green Bay gets the same shared revenue as the behemoth New York Jets and Giants — should be scrapped.

“Right now, we are subsidizing this [Twin Cities] market,” Jones told reporters at the Dome. “It’s unthinkable to think that you’ve got the market you got here — 3.5 million people — and have teams like Kansas City and Green Bay subsidizing the market. That’s going to stop. That’s on its way out.”

Jones, of course, has a new $1.15 billion stadium, with more than $300 million in public subsidies. He’s got a lot of bills to pay. Jones said he won’t take resources “away from the Cowboys so that I can help the Vikings.”

But even if the Vikings get a new stadium — and we have many miles to walk, issues to resolve, dollars to find, priorities to address and political leaders to engage before then — can this community support it and all the other facilities in town?

Ellerbe Becket

Here is one of several concept designs for a new Vikings stadium.

Vikings officials believe the answer is yes; the team remains popular. The one-game-a-week nature of the NFL reduces a fan’s costs. This is a Vikings town, what with about 58,000 season tickets sold for the 2009 season. Still, there is concern about the glut of luxury suites and corporate dollars needed to support yet another new facility in the market.

Before the opening of TCF Bank Stadium this week, there existed about 220 suites and 3,900 club seats in the Metrodome and the two multi-purpose arenas, Target Center and Xcel Energy Center.

With the opening of the Gophers’ football stadium and Twins ballpark, there will be about 310 suites and more than 8,200 club seats. Prices for the suites in town range from $45,000 a year at TCF Bank Stadium to about $200,000 for a super suite at the new Target Field.

If the Dome were to die and Vikings were to get the stadium they want, they’d add 7,500 club seats and would boost the total suite inventory in town to at least 320. As a sign of the times and an indication of the market, when the Vikings began thinking about a new stadium a decade ago, there was talk of as many as 150 suites; now they’ve scaled that back to about 115 suites, or just about 15 more than the Metrodome has.

Let’s say this Twin Cities market has 320 suites at a conservative average of $100,000. That’s $32 million a year from Minnesota corporations. Every year. Forever. Can this community do it? Which sports franchise will flounder?

The Minnesota Twins’ Target Field, with real grass now in place, is nearing completion for its April debut. Adjacent to it is Target Center, with its new “green” roof.

Community economic shortfallThree years ago, researcher G. Scott Thomas of American City Business Journals and bizjournals.com analyzed sports markets and concluded that the Twin Cities are as stretched as any market in the nation.

In his 2006 calculations, a community needed about $196 billion in regional personal income to support one NFL team, one Major League Baseball team, one NHL team and one NBA team. The Twin Cities, based on 2006 data from the U.S. Bureau of Economic Analysis, had total personal income of its residents of about $171 billion.

So, in his view, the Twin Cities market was already at minus-$25 billion for existing teams. We didn’t have the capacity to support them fully.

The Twin Cities remain the second-smallest metro area with all four major league teams. Only Denver’s metro area is smaller, but its NBA and NHL teams share an arena, so two facilities aren’t competing for suite and premium-seating sales. The Target Center-Xcel Energy Center competition places special stress on corporate dollars for sporting events, as well as forcing self-defeating lowball bids as the arenas try to outdo each other in attracting major touring entertainment shows, such as superstar rock concerts.

So, we’ve got two new stadiums poised to open. One about to be debated. Did we mention that Target Center will turn 20 next year and is among the older arenas in the NBA? The city of Minneapolis and AEG, the international firm that manages the building, have been examining ways to upgrade the outdated arena. How much will that cost? Who will pay for that?

As the band plays and the jets fly over Saturday, let’s cheer while we can, before we get down to the sober community business of trying to sustain local franchises and afford a sports industry under stress.

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Comments (46)

Nicely laid out- I’m not sure if all the teams are sustainable, and in all honesty, don’t really care that much. I think our society as a whole would be far better off if people spent less time in seats (usually uncomfortable) watching over-paid athletes, many with physiques of questionable origin, and more time doing something athletic themselves.

Jay, you missed the biggest issue here: the lack of a large, independent corporate base in the Twin Cities. Generally speaking — and taking the Vikings out of the mix, because NFL TV revenues so skew the formula — a sports team will make a third of its money on gate revenues and game proceeds, a third on sponsorships and a third on advertising (including radio and TV rights). While there’s been an issue selling high-end seats, that’s not as major a revenue stream as you are assuming. The bigger issue is the lack of a local, independent corporate base in the Twin Cities. Back when the Vikings, North Stars and Twins all came to town there was a large contingent of Fortune 500 companies offering sponsorship money. That base is simply gone. In addition, we have exactly one locally owned broadcast company, so no team has been able to fuel a bidding war. The Twins have done a pretty good job of addressing this with the KSTP deal.

You are exactly right about Target Center; no major metro area has been able to support two arenas. Witness Kansas City (where Kemper is pretty much doomed), Detroit (where Joe Louis is on its last legs), Newark, Miami, and Dallas. Just can’t be done.

Don’t worry Jay, if history is any indication the teams will get all the public subsidies they need. Who needs fans when you have tax payers? I’m sure Opat is working tirelessly for the Vikings as we speak.

If I have learned anything about marketing in the 50 years I owned ad agencies, it is THERE IS A PRICE POINT FOR EVERYTHING. And pro sports has likely reached that price point now — the recession not-with-standing. When it costs almost $500 to take a family to a Vikings game, there will be more than resistance, they will stay at home. The Twins have laready raised prices in their new stadium and the most affordable pr sport is now at a tipping point in pricing — especially after the first season…if they do not win. (As Sid Hartman said the other day “new stadiums do not help you WIN”).

If it were not for TV revenue (now shared but even that is at risk) pro sports with their outrageously high salaries, debt service, and other rising costs would be in tough shape — and now even the media is in a financial funk. None of which bodes well from a financial or marketing point of view for the industry.

The Twin Cities is (along with Denver) the smallest market with all four major sports teams.

Add to that the three major college teams (men’s hockey, basketball and football) and this market, compared to any other is over-saturated.

So what gives? Gophers aren’t going anywhere. Twins are next most secure. That leaves three – Vikes, Wild and Wolves. The Wild are a strong franchise in a weak league. They rate next most secure.

Vikes and Wolves as constituted are weak franchises in strong leagues. On a relative scale, Vikes are less weak and NFL is more strong. However, the fix for them is a new stadium, expensive, tenuous and not in their control. The fix for the Wolves is building a winner – theoretically more in their control.

The money will be there or teams and leagues will go away. It should be interesting the next 5-10 years.

I consider myself a huge sports fan and the ideal demograhpic for pro sports teams. Educated, professional business person, with disposable income, and in my 30’s. Yet, I will typically turn down free tickets to any of the local pro teams regular season games. The reasons are 1. prefer to watch it home and 2. Generally too busy.

I don’t think I’m alone in prefering to watch a game at home. The beer doesn’t cost $10 a glass either.

The other big problem; I don’t think the youth have any clue of what professional sports are today.

I think the point about the structural change in the market is important an interesting. I have no doubt at all that the Minnesota business community can support all sports teams in the area. The question is, will they?

I think what’s happening at Yankee Stadium is important. The wealth in New York is beyond imagination, but as even the most casual observer can see from any televised game, the Yanks are unable to sell field level box seats. I think there are basically two reasons for that, first that the companies that would have purchased those seats in the past are dead and gone, and second, the survivors no longer see those seats as having sufficient value.

I think the area of corporate executive as prince of capitalism, exchanging shareholder financed favors, with their peers across the country and across the world is either gone forever or temporarily suspended for now. These days, shareholders and their lawyers want to see value for their dollar. They want increasing productivity at an efficient price. And they most certainly don’t want to see highly paid executives taking in a ball game with the shareholder’s money. How long this new austerity will last is anyone’s guess.

Sports in this country has not been self sustaining for at least two decades. Without government bailouts the sports bubble would’ve burst at least ten years ago. Maybe the bubble is finally getting too big to sustain even with government bailouts. When the teams stop talking about revenue streams and start talking about spending cuts you’ll know we’re finally in new territory.

I love how the left and the right get together to bash stadium funding. The Twin Cities is a major market (I saw the statistic regarding that we are the 2nd smallest with 4 major teams, but I would like to know how they stack up based on wealth of the population). Infrastructure, whether it be education, parks transportation, museums, or sports, is the foundation of our quality of life. Minnesota has never compromised when it comes to our quality of life, and has always thought proactively. Not only that, overbuilding on infrastructure during a recessionary period is always a good idea, and pays long term dividends. The slant of this article could have been written by John Marty, or almost any Republican candidate for Governor.

While I think Jay’s point in the article is salient, I’m a little concerned with his math.

When measuring the future number of suites and club seats against the current number, you cannot simply add the totals together. Each suite added when a new venue opens only adds to the overall total if it represents a new suite-event.

In other words, currently there are 8100 suite-events (81 games x 100 suites) each season at the Metrodome for Major League baseball. When Target Field opens, those 8100 get subtracted from the market total first, then added back in as 4374 (81 games x 54 suites) Target Field suite events. The net is actually a loss of 3726 suite-events.

My math is still crude because I don’t know how many suites have been sold at the Metrodome for Twins games, or the difference in price between the two — two pieces of information which are really necessary to figure out whether the new facilities actually represent a larger financial commitment. They probably do, of course, but by how much?

Once again, I don’t disagree with Jay’s questions or concerns raised here, but I think there’s more to these numbers than what he reports.

“Sports in this country has not been self sustaining for at least two decades.”

Whether one agrees with the policy or not, for a long time now, and for the indefinite future, sports franchises represent a form of public and private partnership. It really isn’t a question of whether that partnership exists, rather it’s a question of whether the public gets enough in return for what it puts into the partnership. By denying or at least refusing to recognize that such a relationship exists, I think it may be the case that we aren’t getting as good a deal as we can get.

The Twins now don’t sell any of the suites at the Dome. All of that revenue is captured by the Vikings.

There may be fewer “suite events,” as you call them – although the Dome suites aren’t sold out for Twins games – but there are now TWO suites that must be sold in the market; one by the Vikings in the Dome (as long as they’re in the Dome) and then one in Target Field.

If and when the Vikings get a new stadium, there will be even newer suites to be sold by the NFL club, most likely at the expense of the other franchises and their facilities.

No matter what is said, written, or implied the Twin Cities[& MN] sports demographics are at the saturation and tipping points now. [This article even forgot to mention the MN Swarm, pro lacrosse team in St.Paul.]

In the early 80’s and late 70’s, the UofM’s Memorial Stadium could have been remodeled and revamped for $15-28 million dollars to a state of the art collegiate edifice!!! But, no, go to the Dome to enhance recruitment etc. The end result was today’s nearly $300 million artifact to the sports gods! Notre Dame, OSU, and Michigan are great examples of revamping existing facilities.

The Twins were the poor step child to the Dome and were made never to forget it. Thus, they wanted out. Outdoor baseball has it romantic moments and I won’t argue that. Outdoor baseball is the true venue.

The Vikings could refurbish and revamped the Dome for their needs for a fraction of the cost of a new stadium. Considering the present and future sports revenue picture that may be the best way to go. A winning team would help keep the seats filled.

As for the Wild, if they keep at it and maintain a populace appeal they will fill seats; a Stanley Cup would help too.

The only unknown to all this are the overinflated sports salaries and the inequities to the revenue streams to sports in general. Money isn’t everything but it becomes a major problem when fans are not working and can’t afford to feed their families.

For the time being the Twin Cities sports impresarios, owners, corporate sponsors, players, and even the fans must find ways to work with the resources at hand to stabilize the TC sports scene.

The Twin Cities sports scene is up to its proverbial neck in lemons and limes. Now to make a refreshing citrus punch from all this is the challenge. At present, there is a lot of Twin Cities hot air spoiling the fruit. You can’t count on the overburdened taxpayers to clean up the mess left over.

Can this be the great challenge for the survival of a viable MN sports environment? Only time and cooler creative thinking will tell.

I thought I should note in passing a big difference between the Vikings and the Twins. The Twins have 81 games worth of tickets to sell, and because of lower tv revenues are more dependent on ticket sales than the Vikings. Because they have such a large inventory of tickets they are very dependent on the corporate community to purchase a pretty big share of them. Because of this problem generally, baseball franchises must be located in a relatively large community with a significant local corporate base to survive. That’s a reason why threats to move by baseball franchises are so often empty. There aren’t many cities who can afford a franchise who don’t have one.

Football is different. With only 8 games, exhibitions not really counted, the number of tickets they must sell is much lower, and so the base of possible purchasers, both individual and corporate is much greater because the cost is much lower. The downside of this is that NFL franchises do not require large communities to survive. It’s possible for the Rams to move to LA, because they can still sell the same number of tickets, and other revenues principally TV are constant. And that means there are many more cities to which an NFL franchise, so threats to move, if they ever do come from the Vikings, will not be empty.

//sports franchises represent a form of public and private partnership.

I’m not sure these franchises can be fairly described as partnerships. The teams are privately owned and do not share revenue. When the public funds stadiums those paying the various taxes never get a return so it’s not an investment. Bond holders get paid, but the taxpayers just pay. Economically they’re a wash for communities, they don’t really generate additional revenue, and there are a host of irreconcilable fairness issues. The concept of partnership also implies voluntary nature, and informed consent. These teams get their stadiums through blackmail for the most part by threatening to leave, and elected officials almost always have to end run popular sentiment and opposition get them built.

Is it a good deal? Decidedly not. The teams double their value, stabilize and enhance revenue streams to the tune of hundreds of millions of dollars, the public gets strained resources and a chance to pay to sit in the new stadium some day.

This leave us with the cultural amenities question. You can say whatever you want about sports, but I think it’s clear that the vast majority of people do not think sports are amenities worth hundreds of millions or billions of dollars, if they did we could have straight forward referendums and they would have been passing rather than failing for the last twenty years. People are willing to pay for amenities, we just passed a tax for water conservation and the arts, but the scale of these stadiums and the imbalance of owner contributions is too much. So I’ll say it, these things are welfare programs for billionaires and most people get that on some level. At any rate partnerships can be dissolved, we need to check into that.

Doug Grow just wrote a piece here Minnpost about the Polads and the stadium. That provoked a lengthy exchange some may be interested in.

“I’m not sure these franchises can be fairly described as partnerships.”

How about unfairly? I am using language here not in a strict legal sense and maybe that’s why I am confusing. Maybe it would be better to describe the relationship as a joint venture. I do think we can get some value out of looking at the situation a little more broadly.

Here’s the deal. The Twins get a stadium which both they and the county paid for. The Twins get the ticket revenues, the county and the state, the silent but very real partner, get any taxes generated. Those taxes come from a variety of sources, but include income taxes on player salaries both home and visiting, on anybody else working their, and on people whose income is increased by the fact the Twins play here. While it may be a wash overall, it is entirely possible that the stadium is good for Hennepin County and bad in the same degree for everyone else.

“These teams get their stadiums through blackmail for the most part by threatening to leave, and elected officials almost always have to end run popular sentiment and opposition get them built.”

Blackmail is such an ugly word. If the community wanted keep the Twins here, they would have to meet the Twins price. Nothing wrong with that.

When thinking about whether something is a good deal or not, I try to focus on what I am getting. If I am happy, I don’t lose a lot of sleep over how happy somebody else might be. The fact is, when somebody is in a better bargaining position, they get a better deal. That doesn’t necessarily mean the weaker got a bad deal, or a deal he should feel dissatisfied with.

I am pretty widely on record as saying that the Twins Stadium is our own permanent monument to bad economy policy. But there is part of me that recognizes and is skeptical of my inner grinch. All economic calculations exclude the value of a father taking his son to see a ball game on a warm summer night in Minnesota. We don’t attach dollars and cents numbers to that. But if we did, and if we multiplied that by the total number of such experiences in a season or a lifetime, and added that figure into the overall numbers, how would the deal look then?

//Those taxes come from a variety of sources, but include income taxes on player salaries both home and visiting, on anybody else working their, and on people whose income is increased by the fact the Twins play here

Actually Jason DeRusha did a question thing the other night, how much to the Vikings bring into the state? The figure was 18 million bucks a year. That included tax revenue on ticket sales and players salaries. Now that doesn’t mean the ticket revenue would be completely lost if the Vikings weren’t here, people would still spend that money elsewhere. The only real revenue you’d lose without the team is the players salary which is around 11 million dollars a year. You wanna build Ziggy a billion dollar stadium in exchange for 11 million a year in income taxes? And that’s assuming there are no ongoing public expenditures associated with stadiums. I don’t know what the Twins numbers are, and I’m not sure why DeRusha used Viking figures instead of Twins figures, especially since he was supposedly answering questions about the new stadiums, but I doubt the numbers are that different.

//All economic calculations exclude the value of a father taking his son to see a ball game on a warm summer night in Minnesota.

I know this is a real warm and fuzzy image, but we’re talking about public resources here, limited resources. I’m not excluding the value of a father taking his son to a game, I’m remembering that while one father is taking his son to the game, another father is taking his son to a homeless shelter, literally blocks away. Just because you can’t assign a value to the joy of baseball, doesn’t mean it’s priceless, and it doesn’t mean it’s not or can’t be over-valued. I support all kinds stuff that I personally don’t enjoy, that’s not the issue, it’s the scale, hundreds of millions of public dollars that can’t be deployed or redeployed. Father’s and sons have been enjoying each others company and sharing special times for millions of years, that’s not going to stop if a pro team leaves town.

The figure was 18 million bucks a year. That included tax revenue on ticket sales and players salaries.

Does it include taxes on salaries of players coming here? Does it exclude taxes Vikings players pay elsewhere and deduct here. Does it include taxes on broadcasters salaries or any of the other multitude of people who the games bring to town?

How did DeRusha get that figure by the way? Did he get a number from the state revenue department? Did he go to a tax attorney or accountant familiar with the rather complex tax situation of pro athletes and broadcasters?

“The only real revenue you’d lose without the team is the players salary which is around 11 million dollars a year.”

I think Minneapolis would lose lots of revenue. Game days are busy days in downtown Minneapolis. As it happens, Minneapolis’ gain might be someone else’s loss, but hey, that’s their problem. They didn’t build the stadium, we did.

“You wanna build Ziggy a billion dollar stadium in exchange for 11 million a year in income taxes?”

I am not interested in what Ziggy wants. I want us to carefully think about what we want, and what price we want to pay to buy it. Viking football is for sale. How much do we want to pay for it?

“I know this is a real warm and fuzzy image, but we’re talking about public resources here, limited resources. I’m not excluding the value of a father taking his son to a game,”

You might be, but I am not. Just because something is intangible doesn’t make it real. Just because it’s hard to place a specific price, doesn’t mean it’s isn’t valuable. Personally, I believe the most important things in life are neither tangible, nor capable of being valued in monetary terms. I don’t believe the experience of going to a game is priceless, but I don’t believe it’s worthless either. I am not for giving anyone here a blank check. But just as with any other use of those limited public resources, more than dollars and cents are involved, and I know of know particular reason to ignore that fact just because the Vikings are involved.

Let’s be selfish here. Let’s focus on what we need, and maybe on what we don’t need, but what we really want. Let’s not be such Minnesotans worrying that someone else is making a buck or maybe a lot of bucks, just as long as we get what we want at a price we are willing to pay.

You’ll have to ask DeRusha where he got his data. His data however is completely consistent with economic studies that have for decades shown that stadiums bring very little if any additional dollars into a region or city.

//I think Minneapolis would lose lots of revenue. Game days are busy days in downtown Minneapolis. As it happens, Minneapolis’ gain might be someone else’s loss, but hey, that’s their problem. They didn’t build the stadium, we did.

You know I can’t help but notice you keep circling around to defend a premise you claim to reject. You say you acknowledge the fact that stadiums are a wash from an economic standpoint but then you want to argue about their economic benefits? You can’t have it both ways.

Pro sports subsidies don’t benefit one city over another, this gets to the fairness issue I alluded to earlier. Sports is entertainment, they’re competing with other local businesses for entertainment dollars. When the the government picks winners by funneling hundreds of millions of dollars into such small family owned companies it distorts the local economy. You’re making all the other entertainment venues subsidize their competition. Ever since it was built restaurant and bar owners downtown have complained about the people who walk by going to and from the games. People spend their money in the stadiums, they’re not gonna stop and drop another $50-$100 for drinks and food in surrounding restaurants and bars.

Then there are the actual negative effects that stadiums have on cities. Look at those stadiums, they’re all sitting on prime downtown property, and they’re all empty most of the time. Almost any office high rise generates more economic activity than a stadium simply because it’s occupied most of the time, and that brings real business to surrounding shops and restaurants. Then there are the traffic and parking issues. While stadiums bring people into the games they discourage other traffic. I’m not the only one who avoids downtown like the plague on game nights because I can’t find decent parking. Stadium related traffic jams actually made the new this weekend.

You also keep circling around this business of whether not the teams are priceless. There is a price tag here, $300 million for the twins, a billion for the Vikings. Look, these stadiums are public bailouts for billionaires. When we bailed out the auto industry we asked for concessions. We asked tens of thousands of workers to take cuts in wages, insurance, and retirement. What concessions do we ask of these billionaire owners and millionaire players? Nothing.

You have to explain to me what’s so selfish about wanting to spend tax dollars on health care, homeless shelters, battered women’s programs, and education, instead of bailouts for pro-sports? It’s not about who’s making the money, it’s about how our public resources are being deployed and who’s benefiting.

Let’s NOT be selfish. Let’s remember that we have public responsibilities. Let’s not pretend that our entertainment is a civic responsibility to be paid for with hundreds of millions of tax dollars. If you really want to know how much we’re willing to pay for the Vikings all you have to is ask. We could easily conduct statewide surveys to determine who we think should pay and how much, and then have a referendum to decide the matter up or down. What I want know is are willing to say “goodbye” to the Vikings or not? You should never get involved in a deal you’re not willing to walk away from, especially if it’s a deal of choice not necessity. If you’re not willing to let them go then you have to admit that you consider them priceless and you’re willing to make your fellow pay any amount for your entertainment.

“His data however is completely consistent with economic studies that have for decades shown that stadiums bring very little if any additional dollars into a region or city.”

That’s very convenient for him.

“You know I can’t help but notice you keep circling around to defend a premise you claim to reject. You say you acknowledge the fact that stadiums are a wash from an economic standpoint but then you want to argue about their economic benefits?”

I freely admit that’s a problem for me resulting from an ambivalence toward the issue. But the fact is, the stadium was built by Hennepin County, and should benefit Hennepin County. If that’s at expense of surrounding communities, that’s their problem.

“Sports is entertainment, they’re competing with other local businesses for entertainment dollars.”

What are those businesses the Twins compete with for the entertainment dollar? When a Minneapolis businessman wants to entertain a client in the evening, what are his other choices besides the Twins? The Guthrie perhaps? When a suburban family is thinking taking something in, what are there competitive choice in Minneapolis? Or do they go camping instead?

“You have to explain to me what’s so selfish about wanting to spend tax dollars on health care, homeless shelters, battered women’s programs, and education, instead of bailouts for pro-sports?”

Nothing at all, but are those really the choices with which we are presented? I thought it was lunacy to build a Gopher Stadium when the U’s tuition is out of control. But for some reason, the two issues aren’t connected by those who make those decisions.

“It’s not about who’s making the money”

But so often in the public discourse, that seems to be exactly what it’s about. I think I have heard the argument that we shouldn’t build a stadium because that would make the Pohlad’s richer just about a million times, and never once have I understood the point of it. If something is a good deal for me, I just don’t care whether it’s a good deal for someone else.

“Let’s remember that we have public responsibilities. Let’s not pretend that our entertainment is a civic responsibility to be paid for with hundreds of millions of tax dollars.”

It’s not a civic responsibility, it’s a civic choice, just as putting money into the libraries was a civic choice. As it happens, I go to libraries more than I go to Vikings games. But I do catch the occasional game on TV, which pretty much makes me a freeloader, benefiting from those folks who pay to see the games.

Let’s consider the dollars and cents of it. How much do you, how much do any of us pay in Twins tax a year? Ten dollars? Fifty dollars? Maybe DeRusha can produce that number. The question each of us should ask with respect to the Twins stadium we have, and Vikings Stadium we might one day get, is whether it’s worth it. Each of us should ask that question for ourselves, and vote and act accordingly.

OK Hiram, we’ve reached the going in circles point. Just to summarize:

The economic facts are the facts regardless of who they may be convenient for. The facts are that these stadium/arena deals are public bailouts for billionaires, they’re public subsidies for pro sports. They bring very little if any additional dollars into the community that subsidizes them, even the Twins ended up admitting that fact. Another important fact is that these franchises could build their own stadiums they just prefer not to as long as they can get elected officials to cough up public dollars. In order to build their own stadiums owners and players would have to cut their costs and salaries. These are not partnerships in any meaningful sense, they are lopsided subsidies.

There are irreconcilable fairness issues associated with these bailouts. No meaningful concessions of any kind are extracted from the beneficiaries of hundreds of millions of dollars of tax revenue. Meanwhile other entertainment venues are and business owners are forced to collect and pay to subsidize their competition. What businesses? Bowling alleys, restaurants, bars, movie and stage theaters, concert venues, Zoos, and a whole host of other venues. Then there are the costs to the community associated with tying up the land that the stadiums sit on, and ongoing expenses.

We’re talking about tax dollars, that’s what public subsidies are. We make choices, and we’re responsible for those choices. When the Polads get every penny of their tax revenue while everyone else gets cuts in services, that’s because we made choices. You may not vote for stadiums or street lights directly, but you still make that choice in a variety of ways. Please, let’s look at the dollars and cents, for the cost of the Twins stadium we could have had two more light rails lines, avoided cuts at Henn Co. Medical Center, and whole host of other public projects that would deliver far more bang for the buck than any stadium. Hell, it’d be better to just give 300 one million dollar grants out to local businesses, you’d generate ten times the economic benefit. As for what business people are going to do to entertain their guests? Their lack of imagination is not my responsibility financial or otherwise. Business people in London make do without a baseball team, figure it out.

So we’re left the aesthetic question, to what extent are pro-sports some kind of cultural amenity. No one denies they are an amenity, but this is the point where stadium supporters suddenly want to stop talking about dollars and cents. Suddenly we can’t put a price on a father going to game with his kid… but we do. It turns out be hundred of millions or even a billion dollars. We can put a price on our amenities, we do all the time, and it’s our responsibility as citizens to do so. No one would even consider a billion dollar public subsidy for a Guthrie expansion, nor should they. I was disappointed when Star Trek was canceled, I got over it, I didn’t ask for a billion dollar subsidy to keep it on the air, nor would I. Subsidies are public policy, when it comes to public policy we need to take care of our responsibilities before we address our “choices”. We should never ask our homeless to pay for stadiums and that’s exactly what we’ve done (sales taxes are the most regressive of all taxes).

Finally, it’s a game people, get a grip. If we lose a team there’s plenty else to do. In fact one could argue that we could have better and more vibrant cities and communities if we didn’t subsidize stadiums and instead put a fraction of those resources elsewhere.

“The economic facts are the facts regardless of who they may be convenient for.”

Possibly, but not necessarily DeRusha’s version of them.

“The facts are that these stadium/arena deals are public bailouts for billionaires, they’re public subsidies for pro sports.”

Well, that’s one way to put it, but I wouldn’t put it that way. I have always thought that the Pohlads could have found better uses for their money and their efforts. I have always thought the Twins were a really lousy investment. But speaking for myself, I just don’t care. If I get the Twins and the Vikings here for what I consider a reasonable price, the fact that the deal is good for someone else couldn’t possibly matter less to me.

“There are irreconcilable fairness issues associated with these bailouts.”

I am old and grumpy, and I long ago gave up trying to reconcile irreconcilable issues.

“Please, let’s look at the dollars and cents, for the cost of the Twins stadium we could have had two more light rails lines, avoided cuts at Henn Co. Medical Center, and whole host of other public projects that would deliver far more bang for the buck than any stadium.”

If those were the choices that were presented, I might very well have opted for the GooGoo projects. But they weren’t and they were never going to be. Had the Twins Stadium not been built, improvements at the Medical Center would not have appeared by magic. In political terms, it is at least arguable, that building such stadiums make other such projects more likely, rather than less likely.

“It turns out be hundred of millions or even a billion dollars. We can put a price on our amenities, we do all the time, and it’s our responsibility as citizens to do so.”

So let’s do it. How much is the Twins Stadium costing any of us on an individual basis each year? How much would a Vikings Stadium under whatever plan happens to be consideration at the moment? Without those immutable economic facts you have such faith in, how can anyone rationally decide?

“Subsidies are public policy, when it comes to public policy we need to take care of our responsibilities before we address our “choices”.”

Public policy ends up doing lots of things at once. We pay for necessities like hospitals, but we pay for amenities, like libraries, and parks and for convenient rail stations too. Maybe that isn’t the way things should be, but that’s the way things are.

Ya know, it gets so tedius sometimes. When people aren’t screaming about wanting government hands off their medicare they want tax dollars to subsidize their professional sports.

These are not “deals” like other deals, these are “public” subsidies, that means they are tax financed. The founding fathers didn’t give the government the right to levy taxes so we could build stadiums surely everyone knows that? Tax revenue is very different from other kinds of revenue, it’s not voluntary like ticket sales. When you use tax revenue your using the coercive power of the government to collect revenue and deliver it elsewhere. I can choose whether or to by a ticket, I can’t choose not to pay taxes. The difference between being a citizen and being a consumer is one is about making public policy, the other is about deciding what you “want” to spend your money on. When your bailing out billionaires while watching bridges collapse you better stop and think about what you’re doing. You can try to dodge your responsibility by claiming you never got to make a choice, but you live in a democracy, stadiums don’t fall out of the sky, we made choices, that’s what the “public” in public financing means.

Hiram, here’s the thing, and there’s no getting around this- if we let people decide how much they wanted to spend on these stadiums, the Twins would have to build their own stadium, and we all know it. You’d lose your team. This is why referendums “doom” stadiums according Mike Opat. Why am I securing the Polads investment? I don’t care what the Polads do with their money, it’s not supposed my problem. I do care whether my tax dollars, no matter how minimal are being collected and spent appropriately whether it be ten cents or ten billion. When you stop being concerned about that, that’s when people die while others go to ball games. Our government has been completely incapable of doing the peoples business for almost 8 years now. The governor and the legislature won’t even meet with each other to address the growing budget disaster, yet they somehow managed to solve Polad’s stadium problem, and just about nothing else. That should be alarming. You didn’t get your stadium because it was a good deal, you got it because we have a corrupt system. That should also be alarming, because while you may like the outcome that system produced this time, you never know what kind of outcome it will produce next time.

By the way, near as I can tell Mr. DeRusha wasn’t doing an anti stadium piece, he was just his “good question” thing. I’m sure he made a good faith effort to provide accurate information, and I’m pretty sure he succeeded.

‘The founding fathers didn’t give the government the right to levy taxes so we could build stadiums surely everyone knows that?”

People always speak with such assurance about what the founding fathers thought. Are seances are being held that I don’t know about? In any event, what the founding fathers did was set up a government which was empowered to make decisions about the issues of the day. Nobody who met in Philadelphia in 1787 was thinking about whether to build a Twins Stadium in 2009.

“When you use tax revenue your using the coercive power of the government to collect revenue and deliver it elsewhere. I can choose whether or to by a ticket, I can’t choose not to pay taxes.”

No, but you choose the elected officials who make those decisions, a principle those founding fathers understood very well. We don’t have a constitutional right to good government or bad government. We don’t have a right to government that agrees with our personal views. We have a right to a government that follows the constitution.

“Why am I securing the Pohlad’s investment?”

Because the people you elected decided that was good policy.

“Our government has been completely incapable of doing the peoples business for almost 8 years now.”

There is a new Twins Stadium in downtown Minneapolis. That’s some evidence at least that the government is capable of doing business.

“The governor and the legislature won’t even meet with each other to address the growing budget disaster, yet they somehow managed to solve Polad’s stadium problem, and just about nothing else. That should be alarming.”

What I find alarming is that the government and the legislature were unable to conclude a budget deal, and the state of my alarm is unaffected by any deals reached between Pohlad and/or Ziggy. Stadium issues are monumental in their insignificance compared to that.

“You didn’t get your stadium because it was a good deal, you got it because we have a corrupt system.”

I am not interested if I got the deal because it was a good deal. I am concerned whether it actually was a good deal. I am still waiting for DeRusha’s numbers on that.

“I’m sure he made a good faith effort to provide accurate information, and I’m pretty sure he succeeded.”

I am sure he faithfully reported what someone told him. I just don’t know enough about how those numbers were derived to understand what they mean. Nor do I know what the agenda was, if there was one, of whoever it was who provided the numbers.

Taxation numbers, particularly in the way they interact with economic issues, are one of those things where the more you learn, the less you realize you know.

//I am not interested if I got the deal because it was a good deal. I am concerned whether it actually was a good deal. I am still waiting for DeRusha’s numbers on that.

OK, now I’m actually confused, what numbers do need from DeRusha? Have you asked him? You’ve gone from acknowledging that stadium deals a wash economically, to apparently recanting that and arguing that either that they are a good deal, or the quality of deal is irrelevant as long as your happy with the outcome (which is or is not selfish- I can’t tell). And now it all hinges Jason DeRusha’s data? As far as I know he’s not even reading this. If you’re waiting for DeRusha or anyone else to produce data indicating that stadiums and teams bring additional revenue, especially revenue anywhere near proportional to the public expenditures… don’t hold your breath, no such data exists.

I can recommend some reading on this if you’d like. Jay Wiener’s book “Stadium Games” isn’t bad for one thing. Then there’s: “Major League Losers” by Mark Rosentraoub. David Cay Johnston also discusses it in his book: “Free Lunch- How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You With The Bill). If you don’t trust these guys you can check out the primary sources they list.

I think we can be pretty sure that the founding fathers didn’t envision a future where we used government to build stadiums for the wealthy while letting our bridges collapse. But we do get the government we deserve, which is why we are responsible for the outcomes. The thing about representative government is once and while you have ask who’s being represented? These lopsided subsidies are not indicative of a government working on behalf of the electorate.

“As far as I know he’s not even reading this. If you’re waiting for DeRusha or anyone else to produce data indicating that stadiums and teams bring additional revenue, especially revenue anywhere near proportional to the public expenditures… don’t hold your breath, no such data exists.”

I think it’s indisputable that the stadiums produce additional revenue to Hennepin County. It may be at the expense of other counties, but their loss is Hennepin County’s gain. It might be a wash where the state as a whole is concerned, but it wasn’t the state that built the Twins Stadium, it was Hennepin County. Even in zero sum games, there are winners and losers.

I am sure all those books are wonderful books, but none of those authors are in a position to substitute their value judgments for mine, just as I can’t substitute mine for their, for yours, or for anyone else’s.

“I think we can be pretty sure that the founding fathers didn’t envision a future where we used government to build stadiums for the wealthy while letting our bridges collapse.”

I think we can pretty sure that what the founding fathers envisioned was the formation of governments that would make political decisions. I think they believed that what those judgments would be, in circumstances that they could knew they could not possibly foresee, would be left to those charged with making those political judgments at the time they needed to be made. There is no evidence at all that the founding fathers regarded themselves as omniscient or otherwise capable of making policy judgments for a future they could not possibly foresee.

“These lopsided subsidies are not indicative of a government working on behalf of the electorate.

If you don’t like the decisions your elected officials make, throw the rascals out at the next election.

I will say that it is interesting that after years of searching, stadium supporters finally identified the weak link of government. The Hennepin County Board is probably the weakest entity that could have had an impact on stadium decisions. We probably shouldn’t give the power to make such important decisions to such an obscure government board, one inherently populated by political non-entities who have so little at stake in the outcome of their decisions. But that’s a whole separate issue.

Once last time, it has been demonstrated repeatedly that the stadiums are a wash for the communities that build them, that would be Hennipen County in this instance. They generate revenue for the owners and players, they double the value of the team, but the economic impact for the city is minimal especially given the huge outlays. Even the twins stopped arguing that they would bring money into Henn Co. I think the Target arena is still costing the city a couple million a year more than it’s making for instance. The county brings money to them not visa versa. They displace revenue, for the city they don’t generate it. You’re assuming that if people didn’t have sports they’d just sit at home a mope, and no one would build anything else where the stadiums are or spend money on anything else.

Ones judgment is of little value if it’s devoid of reliable information, clouded by irrational desire, and distorted by irresponsibility.

They found that over the entire period from 1961 to 2006 the total tax revenue generated by all the teams, at all the sports facilities was $345,400.000 over the last 45 years. We just dropped $300 mil for one stadium for one team, and Ziggy wants another billion I hear tell.

The city of MPLS, in exchange for 87 million to buy the T-wolves arena, has gotten 22 million total from all the teams ever. MPLS has 37 million into the Target cneter, and 25 million into the dome,for a total of 62 million, and they’ve gotten 22 million back.

The city of St. Paul, in exchange for 65 million to build the Excel arena, they’ve gotten 1, that’s “1” million dollars in tax revenue. St. Paul has had expenditures of 3.7 million since building the Excel, and they’ve gotten 1 back, that’s almost a four to one loss.

The report concludes that sports revenue was worth the expenditures, but the numbers are drawn out over 45 years and they omit the new Twins stadium. They also underestimate costs by excluding the construction costs. The report concludes that we got $345 million in exchange for $116 million but if you look closely you see that they’re excluding around $225 million in construction costs and adititional purchases. They exclude these expenses because they claim they’ve been paid off, but that’s kinda bogus, debt payment isn’t income it’s reimbursement. If you ad those costs back in your looking at $339 million in real expenditures vs. $345 in revenue. And this is all before we dropped another $300 mill for the new stadium which puts us at $600 million in exchange for maybe $360 at the moment.

“Once last time, it has been demonstrated repeatedly that the stadiums are a wash for the communities that build them, that would be Hennipen County in this instance.”

Depends on how you define communities, and wash. Of all the possible economic outcomes of building a stadium, how likely is it that the positive consequences exactly match the negative consequences? How likely is it that a flipped coin will land on it’s edge? The fact is economics is a lot more complicated than that. I think it might be true that the economic consequences of a stadium tend to balance out when viewed from a larger perspective, the city gains and the suburbs lose. But the statement waan’t built by an entity with that larger perspective, it was built by the county. Just because something is a wash, a zero sum game, doesn’t mean there aren’t winners and losers.

And where does an accountant come off making value judgments?

How did Gladrey, the accountant, come up with his revenue numbers? Did he include businesses that decided to stay in downtown St. Paul, because of the added excitement of Wild hockey? Did they factor in player income taxes, broadcaster incomes, owner incomes, all the folks who come into town for the day? I really don’t think so.

I can’t help but notice my learned opponent’s purchase in this wrestling mach has shrunk to point where we must pretend we have no working definition of “community”.

You can look for yourself at what was factored in the McGlradrey report, I provided the link. The players income tax was the largest single contribution, $190 million I think, almost two thirds of the total over 45 years. To give that some perspective, for just this year alone the Vikings player payroll is: $121,216,248, and that’s just the Vikings. I think it’s safe to assume that total payroll for all the players of all the teams tops $300 million a year, and that’s just the players.

The additional revenue beyond the payroll tax can’t be attributed entirely to sports. That would assume that had there been no games that spending disappears and it doesn’t. These are entertainment dollars, by and large they would be spent on something else, that money doesn’t just drop out of the economy. By the way, it’s not necessarily the case that people spending money on entertainment is inherently better for the economy than if they spent that money on something else like replacement windows or new cars and boats. There’s no reason to assume for instance that it’s better for people to spend their money on Twins tickets instead of new bicycles (from either a “values” or an economic perspective).

By the way, the tax income on the players isn’t a sure benefit either. $345 million spent on good public policy instead of stadiums may well have produced much more economic activity, which could have created more jobs (there are what 75-100 players on a team?)and drawn more people into the cities for work and pleasure. Had we built a decent public transit system for instance that could have revitalized both downtowns much more than the stadiums did. The “boom” that was supposed to surround the dome never did materialize. It’s probable that had we done something else with that money MPLS would have realized actual sustainable growth. Imagine mixed housing, retail, and office developments on these stadium sites, for a fraction of the money. Imagine automated monorail loops in the downtowns like the one they have in Miami. It’s amazing the possibilities that arise when your not preoccupied with sports.

Hiram, your values are your own, that’s fine. But know that your values don’t entitle you to my tax dollars. It may be the case that you keep getting my money, but not without a fight.

“I can’t help but notice my learned opponent’s purchase in this wrestling mach has shrunk to point where we must pretend we have no working definition of “community”.”

It’s a question of what community we are talking about. Minneapolis, the Twin Cities, Hennepin County, the state? The term “wash” implies a zero sum game. If you include within the community both players of a a game, the outcome for the community is always a wash. There is either a winner balanced by a loser, or the game is a draw. However, if your community is one of the two players, the outcome of a game doesn’t need to be a wash.

You can look for yourself at what was factored in the McGlradrey report, I provided the link.

I did actually, the report makes a number of assumptions many of which were listed, and of course many of them were not. You notice also that the report deals in estimated tax figures, not actual tax figures. There is no indication from the report, that their estimates were done by perhaps reconstructing the tax returns filed by the maybe two or three hundred professional athletes playing in Minnesota. These returns themselves are enormously complex because athletes basically have to file tax returns in every jurisdiction they play in.

//did actually, the report makes a number of assumptions many of which were listed, and of course many of them were not. You notice also that the report deals in estimated tax figures, not actual tax figures.

Nowhere to be seen, as you quite fairly have noticed. And the scope of the problem boggles my mind actually. It just grows and grows. Did the accountants take into account the incomes of the players of other teams that play here? Eight different teams come to the Metrodome. Each team has roughly 50 players, so that’s an additional 400 tax returns that have to be scrutinized. Add to that the tax returns from the NBA, NHL, the lacrosse league, all those highly paid football and basketball coaches that bring their teams to play at the U. Every single one of those people earns income in Minnesota and must pay income tax here. And there Minnesota counterpart must file income taxes when they are out of state, pay taxes there which are deductible here.

//Eight different teams come to the Metrodome. Each team has roughly 50 players, so that’s an additional 400 tax returns that have to be scrutinized. Add to that the tax returns from the NBA, NHL, the lacrosse league, all those highly paid football a…

I always thought the Twins really stuck it to the Minnesota Revenue Department when they signed on to interleague play. Think of the tax revenue the state lost when they gave up games with high payroll teams like the Yankees and Red Sox, so that all of us could share in the thrill of having the Houston Astros come to town.

Zygi’s got our nuts in a vice… he’ll demand a “sweetheart” deal or sell the Vikings franchise for a huge profit. (Paid $600 million in 2005 for the team and will probably sell it for $1 billion next year, but you won’t hear about it until 2011 to minimize the “lame duck” period before the new owner relocates the team to L.A. in 2012.)

If Cleveland could lose the original Browns… MN can lost the Vikings, but I doubt Zygi will leave the Vikings’ brand here like Art Modell did for Cleveland.

Yeah, I just can’t imagine Minnesota without the Vikings, we better come up with a billion dollars pronto before it’s too late. Wait, wait, I just managed to imagine Minnesota without the Vikings… and it’s actually a pretty cool place to live! Maybe we should find something else to spend a billion dollars on?

$350 million in funding from public sources, $325 from the City of Arlington and $25 million for the county, was involved in building the $1.2 billion Cowboys’ stadium.

So far, the deal that’s on the table for a new $954 million Vikings stadium involves $704 million in funding from public sources.

Don ‘t be fooled by the $600 million in public funding from private sources Jerry Jones generated thru the sale of seat licenses.

Since the Cowboys’ stadium is public owned… the seat license fees are considered public funding and are income tax exempt unlike the over $55 million in federal income tax the Panthers owner paid on the $170 million in seat license fees he collect to fund his privately owned and funded stadium in 1994.